Oil and gas exploration company Otto Energy Limited provides the following update regarding operations in its Turkish Edirne Licence in the Thrace Basin (OEL 35%).

• The 149km2 3D survey is now 65% complete and scheduled for completion at the end of September 2007. The survey has been designed to cover the central and so far most prospective part of the permit, including the existing three gas discoveries. The processed and interpreted data should be available in time to finalise well locations for a drilling campaign commencing late 2007.

• The sale of 30% of the Edirne Licence and 60% each of Catalca and Ortakoy Licences to Incremental Petroleum is now complete and the US$5.5 million in funds have been received. The funds will be used to pay for Otto’s share of the ongoing exploration programs and appraisal and development of the existing discoveries to first gas sales.

• The JV is acquiring wellheads, casing and tubing to allow for a five well exploration drilling campaign scheduled to commence in December 2007.

The Joint Venture in the Edirne Licence in Turkey consists of: Merty Energy Ltd (Joint Operator) 10% Petrako Ltd (Joint Operator) 10% Otto Energy Ltd (ASX:OEL) 35% Incremental Petroleum Ltd (ASX:IPM) 45%

Commenting on the news Alex Parks, CEO of Otto Energy, said “Turkey represent Otto’s nearest term cash flow asset. Otto is pleased to have now received all the funds from Incremental as scheduled, to leave us fully funded in Turkey through the ongoing exploration programs and for appraisal and development costs required to get us to first production in 2008.”